The ERC is available to any employer—including non-profits, who paid W2 employees and experienced a significant decline in gross revenue, a full shutdown, or a partial disruption caused directly or indirectly by a Covid-19 government ordinance. The latter is complex and requires tax advisors who specialize in this tax credit.

An eligible employer can currently claim the ERC for qualifying wages paid from March 13, 2020 – September 30, 2021.

Businesses and non-profits that began operations after February 15, 2020, can qualify for up to $50,000 per quarter, including the 4th quarter of 2021.

You are not eligible if you do not pay W2 wages outside of owners and their family members by blood or marriage. You are not eligible if you did not experience a ‘nominal impact’ on part of your business from government mandates related to Covid-19. If you are the latter, it often takes an in-depth analysis to make this determination. There is no financial risk to do this.

Yes, if you closed temporarily but paid W2 Employees in some of the seven eligible quarters, you may qualify.

It’s hard to find anyone who will do this work for less than 5 full-time employees. However, we have a partner firm willing to do it.

Whoever owns the EIN can file for this credit. The checks are made to the entity/EIN that paid the W2 wages during 2020-2021. As an example, if a business owner sold the assets of the business (customer list, equipment, logo, etc), but retained the EIN, they can still make this claim. If your number is fewer than five, we recommend asking your accountant if you qualify for any of the quarters available under “a significant decline in gross revenue.” This is a rather simple calculation, and if you qualify under one quarter for this, you can often claim one or two more quarters after this. You can also look at the IRS website to see these rules. If you do qualify for some of the seven quarters this way, ask an accountant with ERC filing experience to help you.

If you do not qualify under gross revenue decline for any quarters and have four full-time employees, we can sometimes get an exception. The problem is that the CPA firm that does this work for you often loses money because the claim is so small.

The majority of the money to be claimed is found in the first three quarters of 2021. The more full-time employees you had then, the greater your possible claim is.

Clergy who claim the housing allowance are excluded from the employee count.

Let’s start with an easy example. A restaurant is ordered to shut down its in-store dining, but that same restaurant was permitted to offer drive-thru, pick-up, and/or catering. It requires more rules to define partial suspension under supply chains or other situations that limit commerce, travel, or group meetings. Much of these rules are covered in IRS Notice 2021-20, which is 102 pages. For a shorter read, here are some FAQs from the IRS website. https://www.irs.gov/newsroom/covid-19-related-employee-retention-credits-determining-when-an-employers-trade-or-business-operations-are-considered-to-be-fully-or-partially-suspended-due-to-a-governmental-order-faqs

The best place to read is IRS Notice 2021-20. https://www.irs.gov/pub/irs-drop/n-21-20.pdf


You can also read IRS FAQs. https://www.irs.gov/newsroom/covid-19-related-employee-retention-credits-determining-when-an-employers-trade-or-business-operations-are-considered-to-be-fully-or-partially-suspended-due-to-a-governmental-order-faqs

There is additional IRS guidance on the IRS website in addition to the legislation. The original legislation is found under section 2301 of the CARES Act, but it was revised three times after this.